Patent Reform Moves Forward: Relief from Patent Trolls in Sight?

On December 5th, H.R. 3309, The Innovation Act, passed in the House by an overwhelming majority. The bill is aimed at curbing the abusive tactics of “patent trolls” – companies that acquire the rights to patents for the express purpose of attempting to collect licensing fees from accused infringers. Provisions in the bill would help rein in the most egregious tactics patent trolls – more formally patent assertion entities (PAE) – use.

Magazine media, like many other industries, has been hit hard by suits from patent assertion entities. In a notable case, one PAE sued a number of magazine publishers, TV stations and fast food restaurants for violations of the same patent. Many of the provisions in H.R. 3309 focus on increased transparency – for example, patent plaintiffs would have to specify how their patent is being infringed and disclose anyone who has a financial interest in the patent being litigated. Important for magazine publishers are provisions to protect “end users.” Product manufacturers and vendors would be able to step in and fight lawsuits aimed at users of their products (the “end users”), rectifying a common troll tactic.

With legislation having cleared the House, the action now moves to the Senate, where Senate Judiciary Committee Chairman Patrick Leahy (D-VT), and several others have introduced patent reform bills. While any final Senate legislation is likely to contain a number of the provisions in the House bill, there are a number of additional provisions that several Senators would like to see added to any patent reform legislation. One such provision relates to the widespread sending of frivolous demand letters, a “fishing” tactic often employed by PAEs, and one that has garnered the attention of a number of attorneys general around the country. Others, such as a provision that would allow companies being sued for infringement of certain software patents to challenge the validity of those patents, are more controversial.

As testament to the pervasiveness of the problem, in addition to Congress and state attorneys general, the Federal Trade Commission has also commenced an investigation into the problem.

MPA, in conjunction with an impressively large collection of other industries, has been a vocal supporter of patent reform legislation. With passage in the House already secured, and strong Administration support, the likelihood that patent reform legislation will advance is growing.